Annual check of 29 pork companies: high price makes pigs fly

In terms of performance, although in the first half of 2019, nearly half of the pork stock companies had a weak performance. However, due to the recovery of meat price in the second half of the year, by the end of 2019, only four enterprises had a decline in net profit, the largest decline was LUONIUSHAN, down 92.27% year on year. With a year-on-year growth of 1075.37%, muyuan shares has become the pork stock enterprise with the fastest net profit growth.

In the annual report, the breeding enterprises mentioned in succession that the high price of pigs promoted the increase of their own income in the year. According to the data of the Ministry of agriculture and rural areas, on December 31, 2019, the average price of pork in the wholesale market of agricultural products in China was forty-three point two five Yuan / kg, compared with January 2, 2019 eighteen point nine two Yuan / kg up 128.59% u3002 In the 52nd week of 2019, the weekly average price of lean white pork in 16 provinces (municipalities directly under the central government) is forty-three point nine eight RMB / kg, compared with the first week of 2019 seventeen point five one Yuan / kg up 151.17% u3002

Behind the rise of pig price is the tight supply of pork market. In 2019, affected by African swine fever, Chinas pig production declined. According to the data of the National Bureau of statistics, in 2019, Chinas pork output will be 42.55 million tons, down 21.3% year on year; the number of pigs on hand will be 310 million, down 27.5% year on year; the number of pigs on hand will be 544 million, down 21.6% year on year.

In order to guarantee the supply of pork and stabilize the market demand, the state and local governments have introduced a series of measures to encourage the resumption of pig production since September. Among them, the Ministry of transport began to implement the green channel for vehicles legally transporting piglets and cold fresh pork; the Ministry of natural resources said that it would allow pig breeding land to use general cultivated land without occupying permanent basic farmland; the central budget invested and arranged 300 million yuan in the construction of large-scale pig breeding farm.

Muyuan shares mentioned in the annual report that after October 2019, with the implementation of a series of policies and measures, the confidence of farm households in increasing breeding and replenishing livestock has increased, and the national pig production has stabilized and recovered. At present, all pig companies are still confident in the follow-up resumption of production. In 2020, muyuan Co., Ltd. plans to sell 17.5 million to 20 million pigs; Zhengbang technology plans to sell 9-11 million pigs; new hope Liuhe plans to sell 8 million pigs. As far as the long-term goal is concerned, Wynn shares plans to sell more than 56 million pigs in 2024, while Tang Renshen plans to sell 10 million pigs in 12 years.

Pork air outlet take off

Lei Jun, founder and CEO of Xiaomi, once described the need for entrepreneurship as standing on the tuyere, pigs can fly. Maybe Lei Jun didnt think that in 2019, the pig really flew. The pork price keeps rising in the year, which makes the pork stock attract more and more attention in the secondary market. From January 2, 2019 to December 31, 2019, the pork index soared from 817.47 to 1359.32, up 66.28%, according to Dongfang wealth choice.

According to the calculation of the Beijing News, in 2019, the share prices of four representative enterprises, muyuan, Wenshi, Zhengbang technology and tianbang, rose by 206.07%, 28.49%, 203.94% and 79.79% respectively. Among them, the highest share prices of Wynn, Zhengbang technology and tianbang in the year are from March to April 2019. As of December 31, 2019, the total market value of muyuan shares and Wenshi shares exceeded 170 billion yuan, reaching 195781 million yuan and 178.483 billion yuan.

Wu Li, Wei Zhenya and Chen Xiao, analysts of Tianfeng securities, pointed out in the research report that the pig industry in 2019 has a strong allocation value. In the next 2-3 years, it will be a period of rapid expansion of the profit boom cycle of the pig industry plus that of the top listed companies, which is a wave of long-term volume rise.

Ma Li, Chen tengxi and Jin Han, analysts of Soochow securities, also said in the research report that in this round of pig cycle, the production capacity will be further reduced, and leading enterprises will realize rapid expansion with multiple advantages such as epidemic prevention, cost, capital, land and talent reserve. After this round of accelerated industrial integration, the long-term market share of leading enterprises is expected to reach the mature steady-state level in the United States, with abundant growth momentum.

Multi field companies focus on pig development

Or see the huge profits brought by pork, many of its pork concept companies involved in multiple fields at the same time have chosen to increase investment in pig breeding.

In March 2020, LUONIUSHAN announced that it plans to divest its real estate business with 1.5 billion yuan. After the transfer, LUONIUSHAN will focus on the main livestock industry and return to the first echelon of animal husbandry. Subsequently, LUONIUSHAN plans to raise no more than 2.78 billion yuan through non-public issuance of shares, invest in 7 pig breeding projects and supplement the companys working capital.

Compared with LUONIUSHAN, more enterprises choose to pay more attention to pig breeding industry on the basis of multiple development. In November 2019, Yisheng Co., Ltd., a leading enterprise of white feather broiler, accelerated the layout of pig breeding industry, and developed pig breeding and pig breeding business by increasing capital and shares to Beijing sifanghong Technology Co., Ltd. In December of the same year, probiotics Co., Ltd. and Heilongjiang eighth five year second farm co invested 1.36 billion yuan to build Heilongjiang annual slaughter processing 2 million pigs agricultural industrialization ecological recycling project breeding end project, which reached the cooperation intention, and will build a breeding sow farm with a total stock of 81600 pigs. Yisheng said the cooperation aims to cultivate new profit growth points to enhance the companys comprehensive competitiveness, which is in line with the long-term development strategy.

New hope Liuhe, which made a lot of profits in the pig industry last year, also plans to increase investment in this field. At the 2019 performance briefing, Liu Chang, chairman of new hope Liuhe, said bluntly, pig farming business will be the most important focus of new hope Liuhe. In 2019, new hope Liuhe of main feed business will realize revenue eight hundred and twenty point five one Billion yuan, year-on-year growth 18.81% u3002 Among them, although the pig industry only accounts for the proportion of revenue 9.12% , but 132.16% However, the year-on-year growth rate of feed, poultry industry, food, commerce and other sectors is far behind.

According to Deng Cheng, director and President of new hope Liuhe, new hope Liuhe has started to allocate part of its feed factories to the pig industry. In the future, new hope Liuhe will incline all its resources to the pig industry. In his view, novel coronavirus pneumonia will overlay the African swine fever epidemic and the boom cycle of pig industry will also lengthen.